Ask price
The ask price is the level at which you can buy a spread bet or open a long position. It is usually the higher of the two quoted prices, and the gap between ask and bid is the spread.
If the FTSE 100 is quoted at 10,800–10,801, the ask price is 10,801.
Bid price
The bid price is the level at which you can sell a spread bet or open a short position. It is usually the lower of the two quoted prices, and it is the price used when closing a long position.
If the FTSE 100 is quoted at 10,800–10,801, the bid price is 10,800.
CFD (contract for difference)
A CFD, or contract for difference, is a derivative that lets you speculate on price movements without owning the underlying asset. You profit or lose based on the difference between the opening and closing price of the contract, multiplied by your stake or contract size. In the UK, CFDs are regulated by the FCA and are high-risk, leveraged products.
You buy a CFD on a UK share at 100 and close at 110 — you gain from the 10-point rise.
Closing position
A closing position is the trade that ends an open spread bet or CFD position. If you opened by buying, you close by selling; if you opened by selling, you close by buying.
You go long on GBP/USD in the morning and later close the position after the price rises.
Commission
Commission is a direct fee charged by some providers for opening and closing a trade. In spread betting, commission is more common on certain markets such as shares, where the spread may be tighter but a fee is added.
A provider might charge £5 per share trade on top of the spread.
Day trading
Day trading means opening and closing positions within the same trading day. In spread betting, day traders usually avoid overnight funding charges by not holding positions past the daily market close.
You open a position on the FTSE 100 at 9:00 and close it before the market shuts at 4:30.
Demo account
A demo account is a practice account that uses virtual money instead of real funds. It is useful for learning how quotes, orders, margin, and stops work before trading live.
You test a stop-loss strategy in a demo account before risking cash.
DMA (direct market access)
DMA means direct market access, where your order is routed more directly to the market rather than being handled only through a dealer. It is more common in share trading and advanced trading setups than in standard spread betting.
A trader using DMA may place orders directly into an exchange order book.
Drawdown
Drawdown is the amount your account drops from a previous high to a lower point. It is often used to measure how much of your trading capital has been lost during a losing run.
If your account falls from £10,000 to £8,500, your drawdown is £1,500.
Equity
Equity is the current value of your account including open positions. It reflects your balance plus or minus unrealised profit or loss.
If your cash balance is £2,000 and an open trade is up £300, your equity is £2,300.
Exposure
Exposure is the total market value you are effectively controlling through your trade. Because spread betting is leveraged, your exposure is usually much larger than your initial deposit.
A £5 per point bet on an index can create far more exposure than the margin you put down.
FCA
The FCA is the Financial Conduct Authority, the UK regulator for financial services. FCA rules for spread betting and CFDs include leverage limits for retail clients, risk warnings, appropriateness checks, and negative balance protection.
A UK spread betting provider must follow FCA rules on how much leverage it can offer retail clients.
Fill
A fill is the execution of your order. A full fill means your whole order was executed, while a partial fill means only part of it was completed.
You place an order to buy at a set price and it is filled when the market reaches that level.
Futures
Futures are exchange-traded contracts to buy or sell an asset at a later date for a set price. In spread betting, traders often speculate on futures markets such as index or commodity futures without trading the contract directly. Futures spread bets do not incur daily overnight funding — the financing cost is built into the quoted price.
You might spread bet on the price of a crude oil futures contract.
Gap
A gap is a jump in price between one trading period and the next, with no trading in between at the skipped levels. Gaps often happen after major news, overnight events, or at the market open.
A share closes at 200 and opens the next day at 220, creating a 20-point gap.
Going long
Going long means buying because you expect the market to rise. In spread betting, your profit increases if the market moves up from your entry price.
You go long on the FTSE 100 if you think UK shares will rise.
Going short
Going short means selling because you expect the market to fall. In spread betting, you can profit if the market drops after you open the short position.
You go short on oil if you think prices will decline.
Guaranteed stop-loss order (GSLO)
A GSLO is a stop-loss that guarantees your position will close at the exact price you set, even if the market gaps through it. This usually comes with an extra premium or wider cost.
You set a GSLO 50 points below your entry so your maximum loss is controlled.
Hedge
A hedge is a position used to reduce risk in another position. Traders use hedges to offset losses if the main trade moves against them.
If you hold UK shares and fear a market fall, you might hedge with a short index spread bet.
Index
An index is a basket of shares or assets used to show the performance of a market. Common UK examples include the FTSE 100 and FTSE 250.
A spread bet on the FTSE 100 tracks movements in the UK’s largest listed companies.
Leverage
Leverage lets you control a larger position with a smaller deposit. It can magnify gains and losses, which is why FCA rules restrict leverage for retail clients on high-risk products. FCA caps: 30:1 for major forex, 20:1 for indices, 10:1 for commodities, 5:1 for shares.
With 10:1 leverage, a £1,000 deposit could control £10,000 of exposure.
Limit order
A limit order tells the provider to execute a trade only at your chosen price or better. It helps you control the price you enter or exit at, though it may not be filled.
You set a buy limit at 7,850 so the order only executes if the market drops to that level.
Liquidity
Liquidity is how easily a market can be traded without causing a big price move. Liquid markets usually have tighter spreads and faster fills.
The FTSE 100 is generally more liquid than a small-cap share.
Margin
Margin is the deposit required to open and keep a leveraged position. It is not a fee; it is collateral that helps cover potential losses.
If a trade requires 5% margin on a £20,000 exposure, you need £1,000 to open it.
Margin call
A margin call happens when your account equity falls too low to support your open positions. The provider may ask you to add funds or reduce positions to restore required margin.
If losses eat into your equity, you may get a margin call before the provider closes trades automatically.
Market maker
A market maker is a firm that quotes both buy and sell prices and stands ready to take the other side of your trade. Many spread betting providers act as market makers.
When you open a trade, the provider may be the counterparty to your position.
Market order
A market order is an instruction to buy or sell immediately at the best available price. It prioritises speed over price certainty, so the final execution can differ from the quoted level.
You use a market order when you want instant entry into a fast-moving market.
Negative balance protection
Negative balance protection means retail clients cannot lose more than the money in their account. Under FCA rules, spread betting and CFD providers must offer this protection to retail clients.
If a sudden market gap creates losses beyond your balance, your account should not go below zero.
Notional value
Notional value is the total market value of the position you control, not the cash you deposited. It is important for understanding real exposure and risk.
A position may require £500 margin but have a notional value of £10,000.
Open position
An open position is any trade that has been opened but not yet closed. Its profit or loss changes as the market moves.
If you buy the FTSE 100 and have not sold it back yet, you have an open position.
Order book
An order book is a list of buy and sell orders waiting in a market. It shows available liquidity and is more visible in exchange-traded markets than in standard spread betting quotes.
A trader using DMA may see bid and offer orders in the order book.
Overnight funding
Overnight funding (also called swap or financing charge) is the cost or credit applied when you keep a leveraged position open after the trading day ends. It is common on rolling daily spread bets and CFDs. For GBP positions, it is typically calculated using SONIA plus a broker markup.
A long position held overnight may incur a small daily funding cost.
Pip
A pip is a standard unit of movement in forex markets. For many currency pairs, one pip is the fourth decimal place, though some pairs are quoted differently.
If GBP/USD moves from 1.2500 to 1.2505, that is a 5-pip move.
Point
A point is one unit of movement in many non-forex markets such as indices and shares. Your profit or loss is often calculated by multiplying the number of points moved by your stake per point.
If you bet £2 per point on the FTSE 100 and it rises 10 points, you gain £20.
Position sizing
Position sizing is the process of deciding how large your trade should be. Good position sizing helps control risk and avoid overexposure.
You choose a smaller stake per point on a volatile market than on a stable one.
Profit/loss
Profit/loss is the money you make or lose on a trade. In spread betting, it is usually the price movement multiplied by your stake per point, adjusted for costs like spread and funding.
If a market moves 15 points in your favour at £1 per point, your gross profit is £15.
Quote
A quote is the current price offered for a market, usually shown as a bid and ask. In spread betting, the quote is what you trade against.
The provider quotes FTSE 100 at 10,800–10,801.
Retail client
A retail client is a non-professional customer under FCA classification. Retail clients get the strongest protections, including leverage limits and negative balance protection.
Most individual spread bettors in the UK are retail clients.
Risk-reward ratio
Risk-reward ratio compares how much you are risking versus how much you hope to gain. It helps traders judge whether a trade is worth taking.
If you risk 20 points to target 60 points, your risk-reward ratio is 1:3.
Rollover
Rollover is the process of extending a spread bet or CFD beyond its original expiry or daily session. It is often linked to funding charges or contract adjustments.
A rolling daily bet can be carried forward automatically each day.
Scalping
Scalping is a short-term trading style that tries to profit from very small price moves. Scalpers usually trade frequently and rely on tight spreads and quick execution.
A trader opens and closes several index trades within minutes.
Slippage
Slippage is the difference between the price you expected and the price you actually get. It often happens in fast or volatile markets and can work for or against you.
You try to buy at 100, but the order fills at 101 because the market moved quickly.
Spot price
The spot price is the current live market price for immediate trading. In spread betting, the quote you see is often based on the underlying spot market.
The spot price of gold is the current market price for immediate delivery.
Spread
The spread is the difference between the buy price and the sell price quoted by a broker. It is the primary trading cost in spread betting and usually widens when markets are volatile or less liquid. Tighter spreads mean lower costs per trade.
If a market is quoted at 50–52, the spread is 2 points.
Stake per point
Stake per point is the amount you win or lose for each point the market moves. It is one of the most important settings in spread betting because it directly controls risk.
At £3 per point, a 10-point move gives you £30 profit or loss.
Stop-loss
A stop-loss is an order that closes your trade if the market moves against you to a chosen level. It helps limit losses, although a normal stop-loss may not protect you from gaps.
You set a stop-loss 25 points below your entry to cap downside risk.
Take profit
A take profit is an order that automatically closes your trade when it reaches a target profit level. It helps you lock in gains without needing to watch the market constantly.
You set a take profit 40 points above entry to exit if the target is reached.
Technical analysis
Technical analysis is the study of charts, price patterns, and indicators to help predict future movement. Traders use it to look for trends, support and resistance, and entry or exit points.
A trader uses moving averages and RSI to decide when to place a spread bet.
Tick
A tick is the smallest quoted movement in a market price. In some markets it is a fraction of a point, while in others it can be the minimum possible change.
If a share price moves from 250.0 to 250.1, that may be one tick.
Trailing stop
A trailing stop is a stop-loss that moves automatically as the market moves in your favour. It helps protect profit while still allowing room for the trade to run.
Your trailing stop follows the market 20 points behind the current price.
Underlying market
The underlying market is the real market that your spread bet or CFD is based on. You are not buying the underlying asset itself, but your trade tracks its price.
A spread bet on Vodafone shares is based on the underlying Vodafone share price.
Volatility
Volatility is how quickly and how much a market price moves. Highly volatile markets can offer more opportunity but also more risk, wider spreads, and more slippage.
A market-moving earnings report can cause a sharp jump in volatility.
Volume
Volume is the amount of trading activity in a market during a given period. Higher volume often suggests stronger participation and can support better liquidity.
If volume rises sharply after news, the market may be more active and easier to trade.